Nissan is set to end merger negotiations with Honda, as reported by the Nikkei newspaper on Wednesday, moving away from a potential alliance that would have established the world’s third-largest automaker and prompting uncertainties about Nissan’s solo recovery strategy.
Several media also cited a source within Nissan, stating that the Board meeting resolved to scrap the talk as the company was unable to reach an agreement on Honda’s proposed conditions.
The Tokyo Stock Exchange halted trading temporarily after Nissan shares plunged over 4% on Wednesday in response to the news. In contrast, Honda’s stock surged over 8% for the day, signaling investors’ apparent relief over the termination of the merger talks.
Last year, both automakers had announced discussions on merging to form the third-largest global automaker by sales, as they sought to strengthen their position in an industry facing significant challenges from competitors like China’s BYD in the electric vehicle sector.
However, sources familiar with the situation disclosed that diverging agendas hindered progress in the talks, with Honda allegedly proposing a subsidiary relationship with Nissan, contrary to the initially proposed merger of equals.
Nissan and Honda refuted the Nikkei report in separate statements, stating that no official company information supported the claim. They disclosed plans to finalize their strategic direction by mid-February with a formal announcement at that time.
The development casts doubt on Nissan’s ability to navigate its ongoing crisis independently, as the company strives to execute a restructuring plan involving significant workforce reductions and global capacity cuts.
